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Business Owner Story #10 – Landru Chocolates

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Oscar Baile immigrated to the U.S. from the Phillipines in the 1970s, with just $500 in his pocket. He first went to Chicago, where he received a Masters of Civil Engineering from Illinois Institute of Technology. He worked for Harza Engineering Company (now MWH Global Inc.) for 30 years before leaving to pursue a new passion – chocolate-making. He is now President of Landru Chocolates, which he runs with the help of his wife and son. Here is his story:

The Start

After receiving my Masters Degree in Civil Engineering in the 70s, I worked for Harza Engineering Company. The job took me to Chile as well as Venezuela and the United States. In 2003, I left my job at Harza and started making chocolates. After a long time of making and perfecting my chocolates, my wife said to me: “you keep practicing, when are you going to start making money?” So I started to develop a business plan. I went back to Venezuela where I knew another former engineer who started a popular chocolate business from which we would buy chocolates. In this shop is where I learned how to start and manage a chocolate business.

How did you fund your business?

I was a stockholder in my engineering company. I mostly used the money I had earned from the stocks I held and put it into Landru Chocolates. We didn’t use personal savings. I live within my means, and we are able to survive well.

Running the business

How did you learn to run a business?

I learned largely through experience. I didn’t have experience going into this, but I knew that one thing within my control was expenses. A lot of people in this business open a storefront right away and never think of saving money to operate the business. In a year or two, they will run out of cash even if they’re selling product because clients don’t pay when you deliver. It takes about a month before they pay you. This causes a problem of cash flow, and many chocolatiers cannot pay off their debt because of it.

Who was your first customer?

My first customer was a bakery in Newark that was on consignment. If there were any chocolates leftover, they would return them. I learned over time that this is not a good proposition; other people do not take proper care of your product, and what they would return could not be re-sold.

The most difficult thing?

The production. You always run the risk of not doing it right, and then the chocolate becomes a waste. Some of these are very difficult to make, and it’s sometimes traumatic. Even though I can make these successfully, there are times that it doesn’t come out right.

The most surprising thing?

How customers come across your business. There are returning customers that order annually, but every year brings a new, different set of customers that try your product.

The most rewarding part about owning your business?

That the products have proven to be high-quality. The best way to prove that you are among the best is to compete with the best. So we’ve competed and won awards for our chocolates, confirming their high-quality. When a famous chef in the industry tells you that your chocolates are good or gives you an award, that really means something.

What I’ve learned

One thing I’ve learned is that it’s not in what you plan, it’s in how you execute things. I set goals for myself – if you leap from one goal to the end goal (fame and success), it’s overwhelming to endure everything in the middle. So I set goals for myself along the way.

I’ve learned that you need to control your resources; if you cannot go to the next goal with the resources you have, maybe you stop or scale down your ambition. At some point, you arrive to certain milestone and say: “I’ve been a success.” When we did these competitions and won awards and prizes, that was signaling to me that we have been a success.

I’ve also learned that the key in any one thing that you want to build is to never give up, but you need to assess whether your goals are reachable. Just being positive isn’t enough; being realistic is important. I knew I could make it in this industry because I have seen others do it before me. So when I started as a chocolatier, I saw to it that my goals were reachable. When I was working in engineering, we had projects that would be up to 15 years, so I know the patience it takes to be in an ongoing project (and not give up). I sort of treat this like a project, and as long as my goals are reachable, I will not give up on them.

What entrepreneur do you admire most?

I appreciate many successful people. One example is Steve Jobs. There is a statement that Steve Jobs mentioned, something along the lines of: you don’t need to be a genius to go and change the world. I live by this, in my previous job as an engineer and in my business now.

If you could go back in time and give yourself advice as you were getting started, what would that be?

Developing a business from scratch is very hard. From a business standpoint, it makes more sense to buy a company that has started production already. I don’t know if the personal satisfaction just like I enjoy will be there, but it will be easier. In the beginning, it seems that paying (for example) $100,000 is a lot for an existing business, but what you don’t realize is that you’ll have to spend that much on training anyway. If you buy an existing business, then you can improve on it’s existing products and scale it up.

But then again, nothing can beat the personal satisfaction of starting your own business.

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